Detsky Mir, the country’s largest retailer of children’s
goods, has selected Credit Suisse Group AG and JPMorgan Chase &
Co. to help it sell shares later this year, two people familiar
with the matter said, asking not to be identified before an
announcement is made. The chain is owned by billionaire Vladimir
Evtushenkov’s AFK Sistema.

While many investors have been attracted to the country’s
oil and metals markets in the past, retailers are gaining favor
after companies like OAO Magnit advanced 65 percent last year.
Russia is forecast to be Europe’s biggest retail market by 2018
as chains increase their footprint across the world’s largest
country, according to Euromonitor research.

“The Russian consumer-growth story still looks attractive
to investors, at least in relative terms versus other European
markets,” said Natalya Kolupaeva, an analyst at ZAO
Raiffeisenbank in Moscow.

Lenta, controlled by U.S. leveraged buyout firm TPG
Capital, plans to sell shares in London next month, with a
possible secondary listing in Moscow, two other people familiar
with the matter said. The company is seeking an equity valuation
upwards of $5 billion, said the people, who also asked not to be
identified before details are made public.

Metro Aspirations

Lenta shareholders including TPG Capital and Russia’s VTB
Capital are seeking to sell about $1 billion of stock, they
said. The company doesn’t plan to issue new shares, one person
said.

Metro, Germany’s biggest retailer, may start its IPO right
after Lenta’s sale, according to two people with knowledge of
the matter. Goldman Sachs Group Inc. and Sberbank of Russia have
been named to manage the offering, which could raise over $1
billion, said the people, who also asked not to be identified as
the details aren’t public. The company has thought about a
partial IPO of the unit, Chief Executive Officer Olaf Koch said
in December.

Representatives for the three companies and banks managing
the sales declined to comment when contacted by Bloomberg News.

Lenta selected JPMorgan, Credit Suisse, VTB Capital,
Deutsche Bank AG and UBS AG to manage the sale, people familiar
with the matter said in June.

In the first half of 2013, Lenta was more profitable than
Russia’s largest retailer Magnit. Magnit is traded at nearly 15
times its Ebitda versus average 3.9 times earnings multiple for
companies in Russia’s benchmark Micex index. Magnit has a market
value of about $28 billion in London trading.

Still, Magnit yesterday reported slower sales growth in
December as consumer-spending weakened over the holiday period.
That sent the shares down the most in about 16 months and may
lead investors to revise their expectations for growth in the
market, Kolupaeva said.